Financial data released late this summer included both good and bad news for the U.S. economy and the construction industry.
Single-family home construction rose in June for the first time in 40 months, but multifamily housing construction and private nonresidential construction fell. The Gross Domestic Product (GDP) fell for the fourth quarter in a row, although the fall was not as steep as feared. And the precipitous drop in employment seems to have slowed.
Overall, construction spending rose 0.3% in June, with private construction falling 0.1% and public construction rising 0.3%.
According to IHS Global Insight economist Patrick Newport, single-family housing starts and permits have been improving since January, so he expects single-family construction to continue growing. But the falling rates in multifamily and private non-residential construction will outweigh the positive outlook in single-family and public construction. Construction spending will be a drag on U.S. growth in 2010, Newport said.
Good news came late in August when figures showed national home prices increased 2.9% from the first to second quarters of the year. It was the first quarter-to-quarter improvement in three years. And a monthly index of 20 major cities saw home prices fall only in Detroit and Las Vegas.
The economy shrank by an annual rate of 1% in the second quarter; the four consecutive quarters is the longest contraction since the U.S. Commerce Department began tracking the statistic in 1947. Still, the 1% drop is a considerable improvement over the 6.4% plunge in GDP in the first quarter of the year. Many expect the economy to start growing again in the July-September quarter.
Finally, 216,000 jobs were lost in August, fewer than the 276,000 dive in July. These numbers show that the rate of decline is easing, albeit slowly. The nation's unemployment rate stood at 9.7% for August.